Food stamps take a hit but remain the overwhelming recipient of revenue

President Obama recently signed into law the long-delayed Farm Bill, a massive $956 billion piece of legislation that governs agriculture policy. But it does a lot more than that – it doles out tax dollars in lots of different directions.

In the three-year battle over this piece of legislation, food stamp recipients were among the biggest losers. The new legislation trims the amount of money alloted to SNAP – otherwise known as the food stamp program – by more than $8 billion. Even so, spending on food stamps still makes up more than 80% of the total spending.

“Any funding reduction to this program, which supports nutrition and food access, will make it more difficult for some of the most vulnerable Americans, including seniors and low-income families with children, to afford a healthy diet,” said Nancy Brown, CEO of the American Heart Association.

Food banks worried

Margarette Purvis, President and CEO of the Food Banks of New York, has also expressed concern about the food stamp cuts, warning that food banks will be unable to take up the slack.

“In New York City, we’ve already seen what happens when SNAP benefits are cut: 85 percent of the food pantries and soup kitchens in Food Bank for New York City’s network saw more people on their lines after across-the-board cuts to SNAP went into effect this past November than they saw in the immediate aftermath of Hurricane Sandy, and roughly half reported food shortages in that first month alone,” Purvis wrote in a letter to The New York Times.

Brown is also unhappy about another provision of the landmark legislation. The new law creates alters a fresh fruit and vegetable program to include – at least on a temporary basis – canned, frozen and dried fruit and vegetable products.

“While the association believes that all whole fruits and vegetables regardless of their form are important for kids to eat, the current program plays a unique role by providing the poorest children in our country with much-needed exposure to fresh fruits and vegetables,” Brown said. “We will closely monitor this pilot effort to ensure that it does not undermine the impact and integrity of this nutrition education program.”

Things to like

Brown did find a few things she thinks will be helpful for consumers, even among the reduced food stamp program. For example, it expands the program to include physical activity education, which she says plays an important role in helping Americans maintain their health.

“In addition, the bill authorizes the Healthy Food Financing Program under the U.S. Department of Agriculture,” Brown said. “This program, which establishes grocery stores in underserved communities where none exist, will provide access to healthier foods and help boost local economies.”

Much of the money in the bill not spent on food stamps goes to farmers to subsidize certain crops. The bulk of the subsidies go for production of corn, soybeans, wheat, cotton and rice. The subsides have the effect of helping to stabilize prices farmers receive, and ultimately, consumers pay. Since corn and soy beans are used largely for animal feed, meat prices – which have spiked in recent months – may return to more stable levels.

Dairy policy changes

The bill makes major changes in the way dairy farmers are supported by the government. A number of long-time dairy support programs, such as the Dairy Product Price Support Program and the Dairy Export Incentive Program, are giving way to a new margin insurance program. Dairy processors waged a lengthy battle to prevent inclusion of a new dairy price support system they claimed would significantly boost the price of milk.

While various groups may belong to the winners or losers in this measure the American Farmland Trust (AFT) says the environment is a big winner because the Farm Bill makes the biggest reform in agriculture policy in years.

"The new Farm Bill requires farmers who receive crop insurance premium assistance to have a conservation plan which helps protect erodible soil and wetlands," said Andrew McElwaine,” President and CEO of AFT. "Conservation compliance in past has been applied to over 140 million acres helping farmers save 295 million tons of soil per year. An estimated 1.5 million to 3.3 million acres of vulnerable wetlands have not been drained as a result of this compliance provision."

President Obama recently signed into law the long-delayed Farm Bill, a massive $956 billion piece of legislation that governs agriculture policy. But it does a lot more than that – it doles out tax dollars in lots of different directions.

In the three-year battle over this piece of legislation, food stamp recipients were among the biggest losers. The new legislation trims the amount of money alloted to SNAP – otherwise known as the food stamp program – ...

Spokane start-up gives new meaning to 'food truck'

Warehouse clubs like Sam's Club, BJ's Wholesale Club and Costco have become fixtures in the retail universe with their ability to sell huge packages of food and other products at a discount. Consumers like it because they don't have to shop as often and they usually end up saving money.

The chains keep prices low by cutting deals with suppliers and moving massive quantities in just a few transactions. Consumers, of course, have to be careful. It's one thing to purchase a crate of paper towels – they don't go bad and eventually you'll use them all.

Food items, however, can present challenges since almost everything has an expiration date. Selling meat in large quantities is even trickier. But a Spokane, Wash., start-up – Zaycon Foods – is doing it, and doing it in a most unusual way.

The company started in 2009 when Mike Conrad's brother brought him the idea.

The idea

“He was the meat manager at a grocery store,” said Conrad, the co-founder of Zaycon Foods. “And he thought, 'Every day I get in these cases of chicken. I wonder if I can sell a whole case to the customer if I gave them a really good deal, instead of putting it on a foam tray, wrapping it and selling it for two bucks more a pound.'”

In the initial marketing effort, the brothers sold three truckloads of chicken. In four short years Zaycon Foods has become a nationwide firm, selling cases of fresh meat, out of the back of a truck, directly to consumers, in every state except Hawaii.

“Our business wouldn't exist if the Internet didn't exist, because everything we deliver is pre-sold. When we go to event or location, all we are doing is delivering a pre-sold product,” Conrad said.

How it works

But first it's got to get sold. To make a purchase, a consumer registers at the company's website and states a preference for the types of meat they want to buy. The company then sends an email when a truck is going to be passing through the customer's town. The consumer makes the purchase online and picks up the case of meat at the appointed place and time.

To create such a large national footprint in such a short period of time, Conrad and a cousin looked up 450 food blogs and called each of the bloggers. They asked if they would write a review of their chicken if they received a free package.

Then Conrad and his cousin divided up the country and drove the free chicken to each of the bloggers' homes, personally delivering it.

Power of the Internet

“That was the launch of doing it nationwide,” Conrad said. “All the bloggers tried the chicken, did the review, and we started getting a whole bunch of people registering on our site.”

The mostly favorable reviews stemmed in part, no doubt, from the personal delivery as much as the quality of the product. The end result is that Zaycon Foods has become a player in the bulk food sector, doing the warehouse chains one better on trimming overhead. The company serves 49 states with 25 employees and no stores and has given new meaning to the term "food truck." Their trucks simply show up in towns across America and start unloading meat.

“Most of our locations are churches because churches have big parking lots that aren't being used, except on Sunday,” Conrad said.

The company gives the church a case of meat in return for the use of its parking lot. The churches like that arrangement, Conrad says, because it can then distribute the meat to members in need.

Amazon.com of meat?

It's too early to tell if Zaycon Foods is going to become the Amazon.com of meat, but Conrad says the company has expansion plans. It has already added non-meat food items – like honey and blueberries – to its offerings. It hopes to develop relationships with small farmers and processing plants so that it can support local agriculture while enhancing freshness even more.

“Generally the price is what brings people in,” Conrad said. “Beyond the price, the freshness keeps them. We're trying to get the meat to them in less than five days. If you look at a large chain store, it goes from the warehouse to the distribution center, to the store's distribution center, to the store. It could take 15 days before it's actually on the shelf to sell.”

How much can consumers save buying in bulk, off the back of a truck? Conrad says it's about 50%.

“If you go to a store now I bet you'll find chicken at $2.49 to $3.99 a pound,” he said. “If you're in New York it's $4.99 to $5.99 a pound. Right now I'll selling boneless, skinless chicken, fresh, in New York for $1.84 a pound.”

It's easy to get carried away with the savings, whether you are buying from a warehouse or from a truck. When buying meat, especially, make sure you have the freezer space to store it.

Warehouse clubs like Sam's Club, BJ's Wholesale Club and Costco have become fixtures in the retail universe with their ability to sell huge packages of food and other products at a discount. Consumers like it because they don't have to shop as often and they usually end up saving money.

The chains keep prices low by cutting deals with suppliers and moving massive quantities in just a few transactions. Consumers, of course, have to be careful. It's one thing to purchase a...

USDA is providing grants to help farms and ranches prepare for another one

With memories of last summer's drought and the economic cost to farmers and consumers still vivid, the U.S Department of Agriculture (USDA) is making millions of dollars available to states that were hit particularly hard.

Issues to be addressed by the $5.3 million in Conservation Innovation Grants include grazing management, warm season forage systems, irrigation strategies and innovative cropping systems.

"USDA is working diligently to help American farmers and ranchers rebound from last year's drought and prepare for future times of climatic extremes," said Agriculture Secretary Tom Vilsack. "Conservation Innovation Grants are an excellent way to invest in new technology and approaches that will help our farmers, ranchers and rural communities be more resilient in the future."

Just last week, the National Oceanic and Atmospheric Administration said its long-term forecast calls for continued drought in the Great Plains and Southwest, warmer than average temperatures nationwide and a high potential for floods.

The agency’s “U.S. Spring Outlook” is based on “current conditions of snowpack, drought, soil moisture, stream flow, precipitation, Pacific Ocean temperatures and consensus among climate forecast models,” among other things.

The continued drought is bad news not only for farmers but also for consumers, as it is likely to once again drive food prices higher, as happened last summer.

With memories of last summer's drought and the economic cost to farmers and consumers still vivid, the U.S Department of Agriculture (USDA) is making millions of dollars available to states that were hit particularly hard.

Issues to be addressed by the $5.3 million in Conservation Innovation Grants include grazing management, warm season forage systems, irrigation strategies and innovative cropping systems.

More assistance is being made available to producers

An additional 172 counties in 15 states have been added to the list of primary natural disaster areas due to drought and heat, making all qualified farm operators in the areas eligible for low-interest emergency loans.

Drought assistance

USDA also announced today the availability of up to $5 million in grants to evaluate and demonstrate agricultural practices that help farmers and ranchers adapt to drought. USDA's Natural Resources Conservation Service (NRCS) is taking applications for Conservation Innovation Grants (CIG) to help producers build additional resiliency into their production systems.

NRCS is offering the grants to partnering entities to evaluate innovative, field-based conservation technologies and approaches. These technologies and/or approaches should lead to improvements such as enhancing the water-holding capacity in soils and installing drought-tolerant grazing systems, which will help farms and ranches become more resilient to drought.

Within the last month, USDA has opened the Conservation Reserve Program to emergency haying and grazing, lowered the borrower interest rate for emergency loans, and worked with crop insurance companies to provide flexibility to farmers. USDA has also:

Authorized $16 million in existing funds from its Wildlife Habitat Incentive Program (WHIP) and Environmental Quality Incentives Program (EQIP) to target states experiencing exceptional and extreme drought.

Initiated transfer of $14 million in unobligated program funds into the Emergency Conservation Program (ECP) to help farmers and ranchers rehabilitate farmland damaged by natural disasters and for carrying out emergency water conservation measures in periods of severe drought.

Authorized haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands.

Lowered the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent in 2012.

Simplified the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.

The U.S. Drought Monitor indicates that 63 percent of the nation's hay acreage is in an area experiencing drought, while approximately 73 percent of the nation's cattle acreage is in an area experiencing drought. Approximately 87 percent of the U.S. corn is within an area experiencing drought, down from a peak of 89 percent on July 24, and 85 percent of the U.S. soybeans are in a drought area, down from a high of 88 percent on July 24. On Aug. 10, USDA reduced the estimate for the 2012 U.S. corn crop to 123.4 bushels per acre, down 23.8 bushels from 2011. However, record corn plantings in 2012 have put the crop in position to be eighth largest in history. In 1988, when U.S. farmers were impacted by another serious drought, total production was 4.9 billion bushels. Total production is now forecast at 10.8 billion bushels.

Latest designees

Primary counties and corresponding states recently designated as disaster areas for drought and other reasons include:

Alabama [drought]

Calhoun

Arkansas [drought]

Chicot

Desha

Drew

Colorado [other]

Weld

Illinois [drought]

Bureau

Cook

De Kalb

Du Page

Grundy

Henry

Kane

Kankakee

Kendall

Knox

Mercer

Putnam

Stark

Will

Indiana [drought]

Adams

Benton

Dearborn

Decatur

Fayette

Franklin

Jennings

Ripley

Starke

Union

Washington

Wayne

Iowa [drought]

Adair

Adams

Audubon

Buena Vista

Calhoun

Carroll

Cass

Cerro

Cherokee

Clay

Crawford

Dallas

Floyd

Franklin

Fremont

Gordo

Greene

Guthrie

Hancock

Harrison

Humboldt

Ida

Louisa

Mills

Monona

Montgomery

O'Brien

Osceola

Page

Pocahontas

Pottawattamie Sac

Shelby

Washington

Webster

Wright

Kentucky [drought]

Adair

Allen

Anderson

Barren

Bath

Boone

Bourbon

Boyd

Bracken

Bullitt

Campbell

Carroll

Carter

Clark

Clinton

Cumberland

Edmonson

Elliott

Estill

Fayette

Fleming

Floyd

Franklin

Gallatin

Garrard

Grant

Green

Greenup

Harrison

Hart

Jackson

Jefferson

Jessamine

Johnson

Kenton

Laurel

Lawrence

Lewis

Lincoln

Madison

Magoffin

Marion

Mason

Menifee

Metcalfe

Montgomery

Nelson

Nicholas

Owen

Pendleton

Pike

Powell

Pulaski

Robertson

Rockcastle

Rowan

Russell

Scott

Shelby

Simpson

Spencer

Taylor

Trimble

Warren

Washington

Wayne

Wolfe

Woodford

Kansas [drought]

Nemaha

Louisiana [drought]

Morehouse

Richland

Union

West Carroll

Minnesota [drought]

Nobles

Mississippi [drought]

Quitman

Sunflower

Tallahatchie

Yalobusha

Nebraska [drought]

Cass

Douglas

Fillmore

Lancaster

Otoe

Saline

Sarpy

Seward

Washington

Ohio [drought]

Butler

Defiance

Fulton

Hamilton

Henry

Paulding

Preble

Putnam

Van Wert

Oklahoma [drought]

Murray

Pontotoc

Tennessee [drought]

Madison

Wyoming [drought and other]

Big Horn

Campbell

Converse

Fremont

Goshen

Johnson

Natrona

Park

Platte

Sheridan

Sublette

Washakie

Weston

An additional 172 counties in 15 states have been added to the list of primary natural disaster areas due to drought and heat, making all qualified farm operators in the areas eligible for low-interest emergency loans.

In the past six weeks, the Agriculture Department (USDA) has designated 1,821 counties in 35 states as disaster areas -- 1,692 due to drought -- while USDA officials have fanned out to more than a dozen drought-affected states as part of a total U.S. government effort to offer support and assistance to those affected by the drought.

Help on the way

In an effort to help farmers, ranchers and businesses hurt by the most severe drought in 50 years, USDA intends to file special provisions with the federal crop insurance program to allow haying or grazing of cover crops without affecting the insurability of planted 2013 spring crops -- a move that can help provide much needed forage and feed this fall and winter for livestock producers.

In a separate step, Vilsack said he will modify emergency loans, allowing loans to be made earlier in the season helping livestock producers to offset increased feed costs and those who have liquidated herds.

Crop update

The U.S. Drought Monitor indicates that 63 percent of the nation's hay acreage is in an area experiencing drought, while approximately 71 percent of the nation's cattle acreage is in an area experiencing drought.

Approximately 85 percent of the U.S. corn is within an area experiencing drought, down from a peak of 89 percent on July 24, and 83 percent of the U.S. soybeans are in a drought area, down from a high of 88 percent on July 24. On Aug. 10, USDA estimated the 2012 U.S. corn crop to be the eighth largest in history, at roughly 10.8 billion bushels. In 1988, when U.S. farmers were hit by another serious drought, total production was 4.9 billion bushels.

During the week ending August 19, USDA's National Agricultural Statistics Service reported that 51 percent of U.S. corn and 37 percent of the soybeans were rated in very poor to poor condition, while rangeland and pastures rated very poor to poor remained at 59 percent for the third consecutive week.

New designees

Primary counties and corresponding states designated as disaster areas for drought and other reasons:

In the past six weeks, the Agriculture Department (USDA) has designated 1,821 counties in 35 states as disaster areas -- 1,692 due to drought -- while USDA officials have fanned out to more than a dozen drought-affected states as part of a total U.S. government effort to offer support and assistance to those affected by the ...

Over 1,000 counties seeking U.S. disaster aid

Dry, parched conditions persist in much of the nation, including sections heavily involved in agriculture. That doesn't bode well for food prices, economists say.

Already, corn prices have soared on commodities markets raising the costs to manufacturers, who are likely to pass along that extra costs to consumers. The impact was apparent in last week's Producer Price report from the U.S. government, which for the most part showed price stability.

“The one major exception was food, especially meat prices which posted its highest jump in nearly a year,” said economist Joel Naroff, of Naroff Economic Advisors, of Holland, PA. “Intermediate food and feed costs jumped in June and the drought across the farm belt looks like it will lead to large increases in food costs going forward. That is not good news for consumers as these expenses get passed through fairly quickly.”

So far more than 1,000 counties in the U.S. have applied for federal disaster relief. To quality for that kind of help, the regions must have experienced drought conditions for at least eight weeks.

Last week Agriculture Secretary Tom Vilsak rolled out changes to the natural disaster relief program he said would deliver faster, more flexible assistance to agriculture producers. He said the changes would result in a 40 percent reduction in processing time for most counties affected by disasters.

Bright spot?

"Agriculture remains a bright spot in our nation's economy and it is increasingly important that USDA has the tools to act quickly and deliver assistance to farmers and ranchers when they need it most," Vilsack said.

But the economic damage to the agriculture industry might exceed $50 billion, by some estimates. While that will be sure to cut into exports, of immediate concern to consumers is how that will impact prices on the grocery shelf.

Corn futures have increased nearly 50 percent since the drought began. That will have a huge impact since corn not only goes directly into many manufactured food products but is also a key ingredient in feed for cattle, hogs and chicken. Those prices can be expected to rise in the coming weeks because of the extended drought.

Naroff says food is the main trouble spot in the economy, with other prices fairly tame. In fact, if the economy continues to slow, consumers could be faced with something similar to the “stagflation” of the early 1970s -- when economic growth ground to a halt but prices kept rising.

Dry, parched conditions persist in much of the nation, including sections heavily involved in agriculture. That doesn't bode well for food prices, economists say.

Already, corn prices have soared on commodities markets raising the costs to manufacturers, who are likely to pass along that extra costs to consumers. The impact was apparent in last week's Producer Price report from the U.S. government, which for the most part showed price stability.

Agriculture Secretary Tom Vilsack has designated another 39 counties in eight states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

During the 2012 crop year, the U.S. Department of Agriculture (USDA) has designated 1,297 counties across 29 states as disaster areas, making all qualified farm operators in the areas eligible for low-interest emergency loans.

The most recently designated counties are in the states of Arkansas, Georgia, Indiana, Mississippi, New Mexico, Tennessee, Utah and Wyoming. The U.S. Drought Monitor currently reports that 61 percent of the continental United States is in a moderate to exceptional drought.

"Our hearts go out to all of those affected by this drought," said Vilsack. "President Obama and I are committed to ensuring that agriculture remains a bright spot in our nation's economy by sustaining the successes of America's farmers, ranchers, and rural communities through these difficult times. That's why USDA officials are fanning out to affected areas, to let our farmers and ranchers know that we stand with you and your communities when severe weather and natural disasters threaten to disrupt your livelihood.”

Earlier in the week, USDA designated the entire state of Missouri a disaster area due to drought in response to a request from the state's governor.

Drought damage

Increasingly hot and dry conditions from California to Delaware have damaged or slowed the maturation of crops such as corn and soybeans, as well as pasture- and range-land. Vilsack has instructed USDA subcabinet leaders to travel to affected areas to augment ongoing assistance from state-level USDA staff and provide guidance on the department's existing disaster resources.

To deliver assistance to those who need it most, the Secretary last week effectively reduced the interest rate for emergency loans from 3.75 percent to 2.25 percent, while creating greater flexibility for ranchers within the Conservation Reserve Program (CRP) for emergency haying and grazing purposes.

In addition, the disaster designations announced today fall under a new, streamlined process that simplifies Secretarial disaster designations and will result in a 40 percent reduction in processing time for most counties affected by disasters.

Primary counties and corresponding states designated as disaster areas:

Arkansas:

Arkansas County

Cleburn County

Cleveland County

Crittenden County

Jefferson County

Lee County

Lonoke County

Monroe County

Phillips County

Prairie County

St. Francis County

Georgia:

Douglas County, Georgia

Indiana:

Bartholomew County

Brown County

Clay County

Hamilton County

Hancock County

Hendricks County

Johnson County

Marion County

Monroe County

Morgan County

Owen County

Parke County

Putnam County

Shelby County

Mississippi:

DeSoto County

Panola County

Tate County

Tunica County

New Mexico:

Cibola County

Tennessee:

Shelby County

Tipton County

Utah:

Garfield County

Kane County

Wasatch County

Wayne County

Wyoming:

Fremont County

Sublette County

Agriculture Secretary Tom Vilsack has designated another 39 counties in eight states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

During the 2012 crop year, the U.S. Department of Agriculture (USDA) has designated 1,297 counties across 29 states as disaster areas, making all qualified farm operators in the areas eligible for low-interest emergency loans.

Summer drought is taking increasingly heavy toll

If you are already having a hard time staying within your grocery budget, this will not come as good news. Because of the extended U.S. drought, the U.S. Department of Agriculture (USDA) says we can expect food costs to go up across the board next year.

The forecast calls for a 3 to 5 percent increase in retail food prices next year, on top of additional increases likely to be felt this year. Food prices are up one percent so far this year, according to the U.S. government.

This year's drought has been worse than usual. It's not just the length and severity of it, but the extent of it. Drought-parched counties declared federal disaster areas stretch coast to coast. It's already sent prices for corn, wheat and soybeans skyrocketing.

In it's forecast, USDA said it expects the prices consumers pay for beef and veal to jump 3.5 to 4.5 percent this year. Not only is the feed for livestock more expensive, producers are reducing the size of their herds to save money. With fewer animals being slaughtered, the law of supply and demand drives up prices.

Meanwhile USDA sees no relief in the corn market. Prices of corn for December delivery rose to nearly $8 a bushel this week. Corn prices are up over 50 percent in the last three months.

Dought worsens as summer goes on

During the week ending July 22, USDA reports the portion of the U.S. corn crop rated in very poor to poor condition climbed to 45 percent. Soybeans rated very poor to poor rose to 35 percent. These ratings for both commodities have increased for seven consecutive weeks.

During the same period, from June 3 to July 22, the portion of the U.S. corn rated good to excellent fell from 72 to 26 percent. Soybeans rated good to excellent tumbled from 65 to 31 percent. The current corn and soybean ratings represent the lowest conditions at any time of year since 1988. At the same time, more than half -- 55 percent -- of the nation's pastures and rangeland are rated in very poor or poor condition.

Agriculture Secretary Tom Vilsack this week designated another 76 counties in six states as primary natural disaster because of the loss of crops due to heat and drought. That brings the total for the year to 1,369 counties across 31 states as disaster areas -- 1,234 due to drought -- making all qualified farm operators in the areas eligible for low-interest emergency loans.

The additional counties designated this week are in the states of Indiana, Illinois, Kansas, Michigan, Nebraska and Wisconsin. The U.S. Drought Monitor currently reports that two-thirds of the continental United States is in a moderate to exceptional drought.

"President Obama requested that USDA take the steps within our existing programs to support struggling farmers and ranchers and we announced these new measures earlier this week," said Vilsack.

If you are already having a hard time staying within your grocery budget, this will not come as good news. Because of the extended U.S. drought, the U.S. Department of Agriculture (USDA) says we can expect food costs to go up across the board next year.

The forecast calls for a 3 to 5 percent increase in retail food prices next year, on top of additional increases likely to be felt this year. Food prices are up one percent so far this year, according to the U.S. governme...

Producers in 1,369 counties in 31 states eligible for disaster assistance

Agriculture Secretary Tom Vilsack has designated 76 additional counties in six states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

During the 2012 crop year, the U.S. Department of Agriculture (USDA) has designated 1,369 counties across 31 states as disaster areas -- 1,234 due to drought -- making all qualified farm operators in the areas eligible for low-interest emergency loans.

The additional counties designated are in Indiana, Illinois, Kansas, Michigan, Nebraska and Wisconsin. The U.S. Drought Monitor currently reports that two-thirds of the continental U.S. is in a moderate to exceptional drought.

"As USDA officials visit drought-stricken areas to stand with our producers and rural communities, the urgency for Congress to pass a food, farm and jobs bill is greater than ever,” said Vilsack. “The hardworking Americans who produce our food and fiber, feed for our livestock, and contribute to a home-grown energy policy -- they need action now."

Failing crops

During the week ending July 22, the portion of the U.S. corn crop rated in very poor to poor condition climbed to 45 percent, according to USDA's National Agricultural Statistics Service. Soybeans rated very poor to poor rose to 35 percent. Such ratings for both commodities have increased for seven consecutive weeks.

During the same period, from June 3 to July 22, the portion of the U.S. corn rated good to excellent fell from 72 to 26 percent. Soybeans rated good to excellent tumbled from 65 to 31 percent.

The current corn and soybean ratings represent the lowest conditions at any time of year since 1988. At the same time, more than half -- 55 percent -- of the nation's pastures and rangeland are rated in very poor or poor condition.

Agriculture Secretary Tom Vilsack has designated 76 additional counties in six states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

During the 2012 crop year, the U.S. Department of Agriculture (USDA) has designated 1,369 counties across 31 states as disaster areas -- 1,234 due to drought -- making all qualified farm operators in the area...

Agriculture Secretary Tom Vilsack today signed disaster designations for an additional 218 counties in 12 states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

Counties designated today are in Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming. More than half (50.3 percent) of all counties in the United States have been designated disaster areas by USDA in 2012, mainly due to drought.

"The assistance announced today will help U.S. livestock producers dealing with climbing feed prices, critical shortages of hay and deteriorating pasturelands,” said Vilsack. “Responding to my request, crop insurance companies indicated that producers can forgo interest penalties to help our nation's farm families struggling with cash flow challenges."

Emergency haying and grazing

In response to the expanding drought, Vilsack also announced that livestock producers and other participants in the Conservation Reserve Program (CRP) will now be able to hay and graze acres that have been ineligible in the past. Many of these additional acres have wetland-related characteristics and are likely to contain better quality hay and forage than on other CRP acres.

There are approximately 3.8 million acres that will now be eligible for emergency haying and grazing, subject to certain conditions. Haying and grazing may only occur under strict compliance rules to help minimize impacts on these sensitive specialty practices. In addition, USDA will conduct follow-up monitoring and evaluation of these opened CRP areas to study the effects of the drought and USDA's emergency haying and grazing actions.

Producers should contact their local Farm Service Agency offices for additional information.

Federal crop insurance

In addition, Vilsack has announced that crop insurance companies have agreed to provide a short grace period for farmers on insurance premiums in 2012. To help producers who may have cash flow problems due to natural disasters, Vilsack sent a letter to crop insurance companies asking them to voluntarily defer the accrual of any interest on unpaid spring crop premiums by producers until November 1, 2012.

In turn, to assist the crop insurance companies, USDA will not require crop insurance companies to pay uncollected producer premiums until one month later.

During the 2012 crop year, USDA has designated 1,584 unduplicated counties across 32 states as disaster areas -- 1,452 due to drought -- making all qualified farm operators in the areas eligible for low-interest emergency loans.

Drought monitor

The U.S. Drought Monitor indicates that 66 percent of the nation's hay acreage is in an area experiencing drought, while approximately 73 percent of the nation's cattle acreage is in an area experiencing drought.

During the week ending July 29, USDA's National Agricultural Statistics Service (NASS) reported that U.S. soybeans rated 37 percent very poor to poor, matching the lowest conditions observed during the drought of 1988.

NASS also reported that 48 percent of the U.S. corn crop was rated very poor to poor, while 57 percent of the nation's pastures and rangeland are rated very poor or poor condition.

A list of primary counties and corresponding states designated as disaster thus far can be found here.

There's no letup in the drought gripping much of the nation.

Agriculture Secretary Tom Vilsack today signed disaster designations for an additional 218 counties in 12 states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

Another 44 counties in 12 states designated disaster areas

Agriculture Secretary Tom Vilsack has signed disaster designations for an additional 44 counties in 12 states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

The latest designees are in the states of Arkansas, Iowa, Illinois, Kansas, Kentucky, Minnesota, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma and South Dakota.

During the 2012 crop year, USDA has designated 1,628 unduplicated counties across 33 states as disaster areas -- 1,496 due to drought -- making all qualified farm operators in the areas eligible for low-interest emergency loans. The U.S. Drought Monitor indicates that 66 percent of the nation's hay acreage is in an area experiencing drought, while approximately 73 percent of the nation's cattle acreage is in an area experiencing drought.

During the week ending Aug. 5, USDA's National Agricultural Statistics Service (NASS) reported that U.S. soybeans rated 39 percent very poor to poor, surpassing the lowest conditions observed during the drought of 1988. NASS also reported that 50 percent of the U.S. corn crop was rated very poor to poor. In addition, 59 percent of the nation's pastures and rangeland are rated very poor or poor.

New areas

The latest primary counties and corresponding states designated as disaster areas include:

Arkansas

Lincoln

Iowa

Lyon

Plymouth

Sioux

Woodbury

Illinois

Lake

McHenry

Kansas

Cherokee

Clay

Cloud

Jewell

Pottawatomie

Republic

Riley

Washington

Kentucky

Breckinridge

Grayson

Minnesota

Rock

Mississippi

Coahoma

Nebraska

Adams

Boyd

Burt

Butler

Clay

Colfax

Cuming

Dakota

Dodge

Hamilton

Polk

Saunders

Thurston

Webster

York

New Mexico

Sandoval

Ohio

Williams

Oklahoma

Cleveland

Lincoln

Okfuskee

Oklahoma

Ottawa

Pottawatomie

Seminole

South Dakota

Minnehaha

Agriculture Secretary Tom Vilsack has signed disaster designations for an additional 44 counties in 12 states as primary natural disaster areas due to damage and losses caused by drought and excessive heat.

The latest designees are in the states of Arkansas, Iowa, Illinois, Kansas, Kentucky, Minnesota, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma and South Dakota.

During the 2012 crop year, USDA has designated 1,628 unduplicated counties across 33 states as di...

Consumers are likely to feel the impact at the grocery store

Affected by one of the worst droughts on record, U.S. corn growers are forecast to harvest 87.4 million acres in 2012 -- down two percent from June estimates, according to the National Agricultural Statistics Service's latest Crop Production report.

The growing season began on a very optimistic note, with the fastest corn planting pace on record. However, growers’ optimism waned when the warm spring was followed by a very dry summer, developing into a drought throughout most of the Corn Belt states.

Despite planting the largest number of acres to corn in the past 75 years, growers are forecast to produce 10.8 billion bushels in this year -- down 13 percent from 2011. Based on conditions as of August 1, corn yields are expected to average 123.4 bushels per acre -- down 23.8 bushels from last year.

The effect of the smaller-than-forecast crop is likely to be felt by consumers when they go grocery shopping. Several food makers have already said they plan to pass the higher prices on to shoppers.

Soybeans down, too

Just as with corn producers, soybean growers are greatly affected by the drought conditions. This year’s soybean production is forecast at 2.69 billion bushels, down 12 percent from 2011. Soybean yield is expected to average 36.1 bushels per acre, down 5.4 bushels from the 2011 crop.

In contrast to corn and soybeans, all wheat production remains largely unaffected by the drought and is forecast at 2.27 billion bushels, up 13 percent from 2011. Based on August 1 conditions, the yield for all wheat is forecast at 46.5 bushes per acre, up 0.9 bushel from last month, and up 2.8 bushels up from last year. Harvest in the 18 major producing states was 85 percent complete by July 29.

Good year for cotton

The report also included the first indication for this year’s cotton production. Growers are forecast to produce 17.7 million 480-pound bales this growing season -- up 13 percent from 2011. Producers expect to harvest 10.8 million acres of all cotton, up 14 percent from last year. This forecast includes 10.6 million acres of Upland cotton and 233,400 acres of Pima cotton.

NASS interviewed more than 28,000 producers across the country in preparation for this report. The agency also conducted field and lab measurements on corn, soybeans, wheat and cotton in the major producing states, which usually account for about 75 percent of the U.S. production.

The agency is also gearing up to conduct its September Agricultural Survey, which will focus on wheat, barley, oats and rye growers. That survey will take place during the first two weeks of September.

Affected by one of the worst droughts on record, U.S. corn growers are forecast to harvest 87.4 million acres in 2012 -- down two percent from June estimates, according to the National Agricultural Statistics Service's latest Crop Production report.

The growing season began on a very optimistic note, with the fastest corn planting pace on record. However, growers’ optimism waned when the warm spring was followed by a very dry summer, developing into a drought...

The purchases will also strengthen federal nutrition programs

The Agriculture Department (USDA) will purchase up to $170 million of pork, lamb, chicken and catfish for federal food nutrition assistance programs, including food banks.

The purchase is intended help relieve pressure on American livestock producers during the drought, while helping bring the nation's meat supply in line with demand while providing high quality, nutritious food to recipients of USDA's nutrition programs.

"These purchases will assist pork, catfish, chicken and lamb producers who are currently struggling due to challenging market conditions and the high cost of feed resulting from the widespread drought,” said Agriculture Secretary Tom Vilsack. “The purchases will help mitigate further downward prices, stabilize market conditions, and provide high quality, nutritious food to recipients of USDA's nutrition programs."

Pork, catfish, chicken and lamb

The purchase includes up to $100 million of pork products, up to $10 million of catfish products, up to $50 million in chicken products and up to $10 million of lamb products for federal food nutrition assistance programs, including food banks.

Through the Emergency Surplus Removal Program, USDA can use Section 32 funds to purchase meat and poultry products to assist farmers and ranchers who have been affected by natural disasters. The pork, lamb and catfish purchases are based on analysis of current market conditions.

A major factor affecting livestock producers is the value of feed, which is currently running high because of the drought.

USDA's Agricultural Marketing Service (AMS) purchases a variety of high-quality food products each year to support the National School Lunch Program, the School Breakfast Program, the Summer Food Service Program, the Food Distribution Program on Indian Reservations, the Commodity Supplemental Food Program and the Emergency Food Assistance Program. USDA also makes emergency food purchases for distribution to victims of natural disasters.

Food items are required to be low in fat, sugar and sodium. The commodities must meet specified requirements and be certified to ensure quality. AMS purchases only products of 100 percent domestic origin.

Assistance programs

Within the last month, USDA has opened the Conservation Reserve Program to emergency haying and grazing, has lowered the borrower interest rate for emergency loans, and has worked with crop insurance companies to provide more flexibility to farmers. USDA has also announced the following:

Authorized $16 million in existing funds from its Wildlife Habitat Incentive Program (WHIP) and Environmental Quality Incentives Program (EQIP) to target states experiencing exceptional and extreme drought.

Authorized the transfer of $14 million in unobligated program funds into the Emergency Conservation Program (ECP) to help farmers and ranchers rehabilitate farmland damaged by natural disasters and for carrying out emergency water conservation measures in periods of severe drought.

Authorized haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands.

Lowered the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent in 2012.

Simplified the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.

During the 2012 crop year, USDA has designated 1,628 unduplicated counties across 33 states as disaster areas -- 1,496 due to drought -- making all qualified farm operators in the areas eligible for low-interest emergency loans.

The Agriculture Department (USDA) will purchase up to $170 million of pork, lamb, chicken and catfish for federal food nutrition assistance programs, including food banks.

The purchase is intended help relieve pressure on American livestock producers during the drought, while helping bring the nation's meat supply in line with demand while providing high quality, nutritious food to recipients of USDA's nutrition programs.

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